Open Network for Digital Commerce - Paradigm Shift in the E-Commerce Industry Resulting in Overall Inclusive Growth I

Open Network for Digital Commerce - Paradigm Shift in the E-Commerce Industry Resulting in Overall Inclusive Growth

India is indeed the consumption capital of the world, with the brands around the world looking at entering and growing in the Indian market. India being blessed with a young and dynamic growing urban population and the most stable democracy with overall inclusive growth in the world. India is set to become the 3rd largest online market globally after USA and China with estimated Gross Merchandise Value in excess of USD 350 billion by 2030.

Open Network for Digital Commerce (ONDC), is a private?Sec 8 company established by the Department for Promotion of Industry and Internal Trade?of Government of India to develop open E-commerce. With a target to sign-up 900 million buyers and 1.2 million sellers on the shared network within the next five years, while achieving gross merchandise value of USD 48 billion. With an open gateway accessible across platforms by the buyers and sellers which will be integrated on the ONDC network.

?The focus would be on small merchants and rural consumers, with ease of operation and access to the app in all major regional languages. Users will be able to rate service providers on ONDC, which will be applicable and visible across the network, thereby ending the practice of high pricing and market dominance by certain E-commerce players in India.

The main aim is to tap millions of small businesses that often lack technological expertise and do not have the high cost of on-boarding on other private E-commerce platforms in India.

In April 2022, it’s pilot phase launched in five metropolitan cities of Delhi NCR, Bengaluru, Bhopal, Shillong and Coimbatore. With an ease of on-boarding small retailers, with no cost or very low cost unlike the high commissions paid at present to E-commerce platforms like Amazon, Flipkart and Zomato etc.

Some of the biggest problems that ONDC is looking at solving in the Indian E-commerce industry are as follows:

?·??????Preventing large and monopolistic models in E-commerce in India which has led to large commissions and super-normal profits to platforms rather than to the goods manufacturer.

·??????Deep discounts and sales on large platforms which pushes small businesses to lower their prices to the point that their businesses shut down.

·??????Breach of customer data as large E-commerce players have exclusive access to data of buyer and sellers, thereby create products that have the same attractive feature as any other products being sold on their platform. Prices are also manipulated accordingly, which results in further monopolising the market, pushing down other sellers.?

With the Indian economy marching towards a USD 5 trillion economy, the E-commerce industry will play significant role in overall inclusive development of SME companies which are the backbone of the Indian economy which is possible as a result of one of the best internet and telecom penetration in the world at the lowest cost and with the introduction of 5G technologies in the coming years retail and E-commerce as a sector will grow multifold backed by the robust ONDC platform.

_Dr. Farzan Ghadially.